Black Friday Shoppers Are More Hooked on Discounts Than Ever

The good news for retailers from this Black Friday weekend? More Americans went shopping this year, either online or in stores. The bad news? Those shoppers spent less.

American consumers are addicted to discounts, which is sure to pinch retailers’ profits in their biggest quarter of the year. The National Retail Federation on Sunday released a survey that found shoppers spent $289.19 over the four-day weekend through Sunday compared with $299.60 over the same period a year earlier. The survey of 4,330 consumers was conducted by Prosper Insights & Analytics over the weekend.

At the outset of the holiday season, top retailers, notably Walmart (WMT) and Target (TGT) made clear they would fight hard on price, particularly for traffic-generating categories like electronics and toys. Kohl’s (KSS) offered a $15 credit for $50 of spending rather than the usual $10 credit it gives in the form of Kohl’s cash. Even luxury department store Neiman Marcus, for years too far up the retail food chain to bother much with Black Friday, was more aggressive in promoting its deals.

Under pressure from Amazon.com (AMZN) and one other, retailers did what they had to do bring in shoppers. The NRF estimated 108.5 million Americans shopped online over the four-day weekend, compared to 99.1 million shop visitors. And the proliferation of mobile apps has made it easier to compare prices, adding to the pressure to offer good prices.

“What you’ve got is this cage match in market share,” says Joel Bines, a managing director and co-head of the retail practice at consulting firm AlixPartners. He noted the discounting had started very early in the season, soon after Halloween. At the same time, retailers knew what to expect. But with 27 shopping days to go until Christmas, Bines said it’s too early to panic.

An analysis last week of the circulars of top retailers by Market Track made it clear that deals would be deeper this year. Best Buy’s (BBY) and Macy’s (M)Black Friday deals were 5 percentage points greater than last year, while Walmart’s were four points more.

“While crowds were strong, we believe that most consumers at this early stage responded solely to promotions, especially at lower- and middle-tier retailers,” BTIG analysts said in a note on Monday. The pace of discounting on a weekend that generates as much as 20% of holiday season sales by some estimates prompted BTIG to lower its Holiday 2016 forecast to a rise of 1.7% from a previous forecast of 2%.

The NRF survey confirmed those suspicions: 36.2% of shoppers said all their purchases were on sales, and nearly two-thirds said most of what they bought was discounted.

The NRF, however, stuck to its forecast that sales would rise 3.6%, saying that the weekend showed shoppers were willing to spend and that the level of discounting had been planned.

“Consumers know they can get good deals throughout the season and these opportunities are not a one-day or one-weekend phenomenon and that has showed up in shopping plans,” NRF CEO Matt Shay said on Sunday.